Brian Kruger: walking the talk at Toll

What gives words meaning? It’s an important question that’s kept philosophers and linguists busy for centuries. But for Toll Group Managing Director Brian Kruger, the answer is simple: action.

Speaking at the Dean’s Leaders Forum at the Melbourne Business School in June, Brian told the audience that building Toll’s corporate culture and putting its core values and beliefs into practice is paying off for Australia’s largest transport and logistics company.

Japan Post

And Toll’s former shareholders agree. Three weeks earlier, Japan Post won final shareholder approval for a $6.5 billion takeover of the company.

When the acquisition was announced in February, Japan Post valued that company at $9.04 a share – a 48 per cent premium on the market price at the time.

“The two companies joining together today creates the fifth-largest logistics organisation in the world, with revenues of about US$33 billion,” Brian said. “And they've got aspirations to get materially bigger than that in a fairly quick period of time.”

Before the takeover, Brian and his team had turned Toll into a global company with a sustainable, long-term future by establishing and applying common, group-wide values and beliefs.
“Japan Post is very understanding of the fact that the two organisations come from different countries,” Brian said. “But one of the things that made me the happiest, when we were talking to Japan Post about the opportunities, was understanding that our corporate values are actually quite consistent.”

Sustainable Success

Toll’s values are significant not so much for what they are but for what they’ve achieved.

“You have to go about achieving success the right way if you want it to be sustainable,” Brian said. “You can take shortcuts, but you'll never have sustainable success.”

He said sticking to values, designed for sustainability, is a challenge for public companies under “extreme pressure” to deliver short-term results that meet analysts’ expectations.

The company’s values and beliefs, known as the Toll Way, grew out of the need to implement a consistent corporate culture across an organisation that had grown rapidly through two decades of acquisitions under predecessor Paul Little.

“Paul did something like 100 acquisitions over a very short period of time. And when I joined, and Paul helped start this process, we recognised that it was probably time to slow down on the acquisition front and actually start to try to integrate our existing businesses a lot better than we had done previously."

Core values and beliefs

The result is values and beliefs that help the whole organisation make clear, positive and rewarding decisions.

They include safety, openness and transparency, showing respect for employees, customers, competitors and regulators, improving continuously, learning from mistakes, being part of Toll’s progress, and operating ethically and within the law at all times. But for Brian, the number one value is safety.

Safety first“I don't like ranking our values and beliefs, but if I had to rank one and put it above all others, it's the safety one. I challenge you to find a business that is successful in the long-term that is bad at safety. It just doesn't happen.”

He said there are many good reasons why it's smart for a company to be good at safety, but the main one is to avoid people getting hurt.

“If you've ever had, or have to have, the experience where you've got to ring a family member of one of your employees that's been hurt on your site, or killed on your site, you'll get passionate about safety.”

Doing the right thing

Brian shared many stories of how Toll’s values helped it make clear decisions in difficult situations, including when Toll warehouse staff told a customer they wouldn’t unload their pallets, which had been packed to unsafe heights.The customer withdrew its business, but soon the CEO was on the phone to Brian apologising and thanking him for the tough stand and sending such a strong safety message to his organisation.

Brian said on another occasion Toll lost a 30-year contract with a major retailer to move goods within Queensland. The retailer then asked Toll to manage the business for a further six-months while the company transitioned to a new supplier.

“Despite the fact that our services levels had been fantastic, that next six months, we set records in terms of the service levels for that customer.”

The payoff came when the retailer’s CEO told Brian he had heard the story and that Toll had just won another large contract with the company.

Brian said core values helped the company grow into a major international organisation, with around half of its approximately 40,000 employees working outside Australia, including in Singapore, China, India, the US, the UK and Japan, where it had 4000 employees before the Japan Post takeover.

Win, winIt’s been a remarkable journey for a company, whose founder, Albert Toll, started hauling coal from Newcastle mines in New South Wales 127 years ago, and Brian says the Japan Post takeover simply heralds a new beginning.

“It’s a very, very exciting time for us, and we look forward to our future as part of the Japan Post family.”